Scenario 2 Problem Solution: Global Communications Corporation

Problem Solution: Global Communications Corporation

This paper explains the issues faced by the telecommunications company Global Communications. Global Communications competes in and industry that is known for unusual competitive pressures and very quick changes in technology. However, as stated by Dennis Drogseth (2005, p. 52) "The challenges faced by global networks have more to do with management and process than with pure technology." This paper explores the issues and opportunities available to Global Communications management. The paper also explores the issue from its stakeholder's point of view, and proposes and reviews several alternative solutions until one optimal solution presents itself. Finally, an implementation plan provided which includes the costs of such a plan.

Situation Background (Step 1)

The telecommunication industry has experienced rapid growth and an accompanying huge investment in transmission capacity that has put tremendous economic pressure on the telecommunications industry. the telecommunications industry is also under huge competitive pressures from cable companies who are providing services in areas such as telephones, computers and television. This competition has reduced wall streets confidence in Global Communications and resulted in a 60% depreciation in its stock value.

As a response, Global Communications has developed a plan to out-source its call centers to India and Ireland. In addition, Global Communications has developed a partnership with satellite providers to offer new services such as video and broadband connections that will allow small businesses to anytime internet access using wireless telephones or PC cards.

In order to implement these changes Global Communications will need to inform its domestic union represented workforce of the impending reduction in its workforce, Global Communications must also communicate effectively with its stakeholders. Global Communications will then need to successfully implement its plan.

Issue Identification

There are several issues that Global Communications will face when trying to implement their turnaround plan:

First, is the issue of the disgruntled union employees.

Second is the issue of stockholder confidence.

Third is increased competition.

Another issue that may arise for Global Communications is one of cultural differences. As Global Communications begins to enter the foreign markets of Ireland and Australia.

The fifth issue that Global Communications will face involves the retention of high performing employees.

Opportunity Identification

There are also many opportunities presented to Global Communications:

First is the alliance created with a satellite and wireless provider.

A second opportunity of reducing labor cost is created through the out-sourcing of jobs to Ireland and Australia.

Thirdly, the out-sourcing takes advantage of the high technical sophistication of the workforce of Ireland and Australia.

Increased stock price can be an opportunity that may be realized if Global Communications can begin to implement the plan while avoiding some of the negative issues.

The fifth opportunity for Global Communications lies in the growth of foreign markets.

Stakeholder Perspectives/Ethical Dilemmas

Stakeholders include the board of management, the union, stockholders and, of course, its employees. To be successful, Global Communications must keep employee morale as high as possible. Without employee support, the turnover rate can increase causing quality concerns and the cost of training new employees to rise. The union also has a stake in the continued success of Global Communications, however they also have an obligation to the employees that make up the union. The impending layoffs, wage freezes or wage reductions will make the job of the union very difficult.

Global Communications must gather stockholder support and commitment. Without stockholder understanding, buy in and commitment to the turnaround plan, stockholders will sell there stock to cut losses they feel they will incur. The subsequent downward pressure on stock prices will create a downward spiral in the value of Global Communications making it difficult for the company to secure loans needed to implement the turnaround plan.